Bone integrity is maintained by a dynamic equilibrium between the activities of bone-forming osteoblasts and boneresorbing osteoclasts. Osteolytic lesions are a painful consequence of metastasis of breast cancer cells to bone in an overwhelming majority of breast cancer patients. Factors secreted by breast cancer cells propel a cascade of events that trigger osteoclastogenesis and elevated bone resorption. In the present study, we show that the Hedgehog (Hh) ligands secreted by breast cancer cells promote osteoclast differentiation and potentiate the activity of mature osteoclasts. Paracrine Hh signaling induced by breast cancer cells mediates a detrimental chain of events by the up-regulation of osteopontin (OPN), which in turn enhances osteoclastic activity by up-regulating cathepsin K and MMP9. Hh signaling is essential for osteoclasts because blocking the Hh pathway using the pharmacological Hh inhibitor, cyclopamine, results in an overall decrease in osteoclastogenesis and resorptive activity. Our studies suggest that inhibiting Hh signaling interferes with the ability of pre-osteoclasts to respond to the stimulatory effects of the breast cancer cells, indicating that Hh signaling is vital to osteoclast activity. © 2011 by The American Society for Biochemistry and Molecular Biology, Inc.